Market Policy

On January 23, 2020, FERC accepted New York Independent System Operator, Inc.’s (“NYISO”) proposed revisions to its Tariffs to allow the aggregation of resources, including distributed energy resources (“DERs”), for purposes of participation in the NYISO markets. FERC found that NYISO’s proposed aggregation model (“Aggregation Participation Model”) provided a just and reasonable and not unduly discriminatory framework for such participation.…Continue Reading FERC Accepts NYISO’s Proposed Aggregation Model for DERs and Other Resources

On January 23, 2020, FERC concluded that a “pricing and dispatch mismatch problem” needs to be resolved before PJM Interconnection, L.L.C. (“PJM”) can revise the fast-start provisions in its Tariff, as previously directed by FERC on April 18, 2019. Because PJM currently has a stakeholder process addressing the pricing and dispatch mismatch, FERC placed PJM’s fast-start pricing filing in abeyance until July 31, 2020 to allow PJM and its stakeholders the opportunity to fully consider any necessary changes. …Continue Reading FERC Holds PJM Fast-Starting Pricing Proceeding in Abeyance

On January 14, 2019, FERC issued a letter order accepting, as of October 15, 2019, Midcontinent Independent System Operator’s (“MISO”) proposal to implement a “Fast First” Automatic Generation Control (“AGC”) framework that, as MISO argues, would deploy fast-ramping generation resources more efficiently. MISO explained that the Fast First AGC framework would better utilize and incentivize fast-ramping resources, including energy storage resources (“ESRs”), for frequency regulation. MISO stated that, with increased supply-side volatility on its system due to integration of intermittent renewable resources, new AGC signals were needed for better system control and to better utilize the fast response rate of fast-ramping resources.…Continue Reading FERC Accepts MISO Frequency Regulation Enhancements Addressing Supply-Side System Volatility

On January 14, 2020, FERC accepted revisions to ISO New England, Inc.’s (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”), which update ISO-NE’s Financial Assurance Policy, which aims to ensure that resources achieve commercial operation by the time their relevant Capacity Commitment Period begins. The revisions alter the methodology used to calculate the financial assurances requirements for resources that have cleared the Forward Capacity Auction (“FCA”) but have not yet achieved commercial operation (“Non-Commercial Resources”), basing it on the Net Cost of New Entry (“Net CONE”) value associated with the FCA, rather than the starting and clearing prices of the FCA.…Continue Reading FERC Accepts Revisions to ISO-NE’s Calculation of Financial Assurances Requirement for New Capacity Resources

On December 20, 2019, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) denied petitions for review of a series of FERC orders that exempted certain North Carolina transmission customers of Virginia Electric and Power Company (“Dominion”) from the incremental costs to underground certain transmission lines in the Virginia portion of the Dominion’s service territory. The challenges were brought by certain Virginia transmission customers of Dominion Energy, which sought to overturn FERC’s determination that only Dominion’s Virginia wholesale customers, not its North Carolina customers, should bear the costs of undergrounding three transmission line upgrade projects.…Continue Reading D.C. Circuit Affirms FERC Undergrounding Decision

On December 30, 2019, FERC accepted, subject to further compliance, revisions to PJM Interconnection, L.L.C.’s (“PJM”) Price Responsive Demand (“PRD”) program to align the program’s rules and requirements with those applicable to supply-side “Capacity Performance Resources” participating in PJM’s capacity market. PJM previously submitted PRD revisions in February 2019, but FERC rejected PJM’s filing in a June 2019 order, on the basis that PJM’s proposed method for calculating the Nominal PRD Value—i.e., the MW amount to be curtailed—was inconsistent with the manner in which PJM calculated a Load Serving Entity’s (“LSE”) capacity supply obligation (see July 18, 2019 edition of the WER). FERC’s December 30 order accepted PJM’s proposal to maintain the existing Nominal PRD Value calculation based on a LSE’s capacity obligation, which is itself derived from the LSE’s annual coincident peak demand. In response to a protest from PJM’s Independent Market Monitor (“IMM”), FERC also required PJM to clarify on compliance that an LSE is not eligible to receive certain bonus payments for load reductions during system emergencies when the prevailing LMP has not reached the applicable trigger price.…Continue Reading FERC Accepts Revisions to PJM’s Price Responsive Demand Program

On December 19, 2019, FERC issued a long-awaited order in which it directed PJM Interconnection, L.L.C. (“PJM”) to apply its Minimum Offer Price Rule (“MOPR”) to all state-subsidized capacity resources (“December 2019 Order”). FERC also adopted limited grandfathering and exemptions for certain resources. The December 19 Order will have a significant impact on PJM’s capacity market. PJM requires resources subject to the MOPR to offer into the PJM capacity auctions at or above a PJM-determined offer floor. When this floor is above capacity auction clearing prices, the resource does not clear the market or receive any capacity market revenue. Capacity prices are also higher than they would be had the resource cleared the market.…Continue Reading FERC Orders PJM to Apply the Minimum Offer Price Rule to All Resources Receiving “State Subsidies”

On December 12, 2019, the United States Court of Appeals for the Sixth Circuit (“Sixth Circuit”) issued an opinion affirming in part and reversing in part a bankruptcy court’s assertion of exclusive and unlimited jurisdiction over certain of FirstEnergy Solutions’ (“FES”) power purchase agreements that FERC had previously approved under the Federal Power Act (“FPA”) and that FES sought to reject in bankruptcy. While the Sixth Circuit agreed that the bankruptcy court has jurisdiction to decide whether FES may reject the contracts, it rejected the bankruptcy court’s decision to enjoin FERC from taking any action relating to the contracts, and permitting FES to reject the contracts. Characterizing the bankruptcy court’s decision as “a rash and unnecessary overreach,” the Sixth Circuit held that the injunction issued against FERC was overly broad, and the bankruptcy court’s standard for deciding whether to permit FES to reject the contracts too limited. The Sixth Circuit also rejected the bankruptcy court’s sole application of the business judgment rule to decide whether to permit FES to reject the contracts at issue. Rather, the Sixth Circuit held that the court should have also taken public interest considerations into account, and should have invited FERC to participate and provide an opinion in accordance with the FPA. Judge Richard Allen Griffin penned separate opinion dissenting in part, in which he concluded that the bankruptcy court exceeded its jurisdiction and infringed on FERC’s exclusive jurisdiction to decide whether to modify or abrogate a filed rate.…Continue Reading Sixth Circuit Holds that Bankruptcy Courts Must Permit FERC Participation in Bankruptcy Proceedings Considering Rejection of FERC-Jurisdictional Contracts

On December 5, 2019, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) granted a petition for rehearing en banc of an opinion it issued on August 2, 2019 (“August 2019 Opinion”) upholding FERC’s decision to conditionally approve the application of Transcontinental Gas Pipeline Company (“Transco”) to construct and operate the Atlantic Sunrise Project. Petitioners challenge FERC’s use of tolling orders, which allow FERC to delay rehearing after granting a pipeline certificate, as impermissible under the Natural Gas Act and the Due Process Clause of the Fifth Amendment. Specifically, Petitioners argue that FERC’s use of tolling orders in pipeline certificate proceedings unlawfully require challengers to wait for the rehearing order to issue before obtaining judicial review, while the pipeline can proceed with eminent domain proceedings and pipeline construction following the issuance of FERC’s certificate order. …Continue Reading D.C. Circuit to Review FERC Tolling Orders En Banc

On November 18, 2019, Anbaric Development Partners, LLC (“Anbaric”) filed a complaint against PJM Interconnection, L.L.C. (“PJM”) alleging that PJM’s transmission interconnection procedures deny meaningful open access interconnection service to merchant transmission projects designed to connect remote generation resources, including offshore wind generation, to the PJM transmission system (“Transmission Platform Projects”). Anbaric requested that FERC: find that the PJM Tariff is unjust, unreasonable and unduly discriminatory or preferential because it does not provide Transmission Platform Projects the opportunity to obtain material interconnection rights; direct that Transmission Platform Projects be given the opportunity to obtain material interconnection rights; and order PJM to modify its Tariff to include a new category of Transmission Platform Projects to connect remote renewable generation facilities to the PJM Transmission System. Anbaric also requested that any order from FERC apply to all of Anbaric’s projects with positions in PJM’s interconnection queue as of the date of its complaint.…Continue Reading Complaint Challenges PJM’s Denial of Interconnection Service to Transmission Projects Seeking to Connect Offshore Wind

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